Wall Street Triumphs As New York Governor Blocks Ban On Non-Compete Clauses Despite Vocal Opposition
Despite vocal opposition, Governor Kathy Hochul of New York vetoed a bill designed to ban non-compete clauses in employee contracts.
What Happened: Following considerable pressure from Wall Street, healthcare institutions, and business groups, Hochul vetoed the bill (S3100), reported Bloomberg. This bill sought to halt employers from incorporating contract provisions that restrict employees’ ability to secure new jobs after exiting their current roles.
State Sen. Sean Ryan (D), the sponsor of the bill, expressed disappointment at the rejection of the final proposal. Had the legislation been approved, New York would have followed in California’s footsteps, becoming the second-largest state to outlaw such clauses.
Recent campaigns pushing for the preservation of non-compete clauses for employees with yearly earnings exceeding $250,000 have been directed at Governor Hochul. Public records reveal lobbying activities from organizations like JPMorgan Chase, Goldman Sachs, the Healthcare Association of New York, and the New York City Bar Association.
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Proponents of the bill, which has now been vetoed, have pledged to persist in their endeavors to abolish non-competes. “We'll be back in 2024 and will fight to pass an even more comprehensive ban,” promised Paul Sonn from the National Employment Law Project.
Why It Matters: The preservation of non-compete clauses has far-reaching implications for workers in the state of New York. These clauses can potentially limit employees’ mobility, inhibiting their ability to secure new employment after leaving a job.
This decision by Governor Hochul, influenced by powerful financial and healthcare institutions, underlines the ongoing tug-of-war between employee rights and business interests.
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